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Operating profit margin

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Operating profit margin

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  • October 13, 2022 at 1:15 am #668485
    tjama
    Participant
    • Topics: 4
    • Replies: 3
    • ☆

    Hi,

    If operating profit margin formula is PBIT/ REVENUE, with PBIT including finance cost, why does BPP Revision Kit question 232, answer they dont included the finance cost.

    Also for Gearing ratio, I’m getting if the ratio is Long term interest debt/ long term interest debt + equity OR Debt/equity

    Thank you,

    October 15, 2022 at 9:28 pm #668761
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7090
    • ☆☆☆☆☆

    Hi,

    For gearing, it can be calculated either way.

    The question will possibly have just taken the PBIT figure, hence not required to adjust for any finance cost. I’ve not got the question bank to hand currently, sorry.

    Thanks

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